Competitiveness, identity and development of a new world

Competitiveness, identity and development of a new world

The globalisation of the economy in recent decades has limited the progress of welfare and development around the world. At the same time, various sources from the world of economics point out that the countries and regions with the lowest levels of social inequality are the ones with the highest levels of sustained and lasting growth. What contribution should Euskadi make, from our own particular reality, to help build a fairer, more cohesive world? Where do we fit in, and how do we connect with the new global map of connectivity, whilst preserving our glocal identity?

We are partaking in a never-ending debate between those who support increased globalisation of the economy, while preserving national and international structures, and those who support a strengthening of regional identities within a new framework of international inter-cooperation. The proof of this tug-of-war is found all around us: Phenomena like the Catalan sovereignty process, the Scottish referendum, Brexit, populist governments like Trump’s with his ‘America First’ catchphrase, and of course, not forgetting, much closer to home, the aspiration of a large segment of the Basque population to progress towards more self-government. All of the above, are rallying cries for a greater degree of autonomy; they all seek to adapt the trend towards globalisation to the peculiarities of each region, and the competitive demands of the modern world.

A new competitiveness

The new world order of recent decades, which protects the interests of economic globalisation, is limited in numerous ways in terms of benefitting welfare and development. The combined efforts of the UN, the World Bank, and the IMF to bring about a fairer, more equal society, have been in vain, although we must acknowledge that there has been only partial progress. Nonetheless, many of their respective ‘prescriptions’ have led to alarmingly poor results.

If we stop to analyse the type of world we are creating, we should realise the perversity of the current model. World Bank reports cite the following findings: 800 million people have woken up hungry today; 1.8 billion drink contaminated water daily; 1% of the population own 90% of the wealth generated globally; 1.2 billion have no electricity in their homes, although 150 million of them live in urban areas. Finally, a combination of corruption, fraud and tax evasion in developing countries means that 1.26 trillion dollars of aid programmes is siphoned off, never reaching its intended use. One cannot remain indifferent to such a panorama.
Furthermore, even within the EU, the majority of member states present significant levels of social and economic inequality, proving that global policies must be accompanied with measures specifically adapted to the particular conditions of each individual region.

Faced with this reality, the role of governments must, on the one hand, be as Thomas Pikkety stated, a vehicle to “arbitrate the necessary measures for the development of a new social and economic model which is fairer and more balanced, so that more inclusive mechanisms of wealth creation and the reduction of social inequality can occur.”

On the other hand, the very model of governance must be reinvented. The renewed model would promote new ecosystems or areas based on competitiveness. It would also question the traditional administrative boundaries and divisions, whilst strengthening the key capacities of specific regions in the EU, all within a framework of solidarity and co-operation.

Our world is in continual evolution and is becoming more open and inter-connected. The rise of emerging economies who are substantially improving their competitiveness, is becoming more evident, whilst all around us global value chains are decomposing and are being re-structured. Moreover, all the indications are that there is a need for constructive dialogue which encourages a better quality of life for all citizens. We must, then, find the answers to the questions posed by this new scenario by strengthening our own identities, as we secure a high level of global connectivity and, by taking action when faced with each and every type of dilemma which affects the welfare of our peoples.

What we need is a viable alternative in order to promote the growing inter-connectivity amongst world economies which, at the same time, respects the identities and specific realities of each region. To do so, we must strike out against the growing individualism of society by generating development ecosystems based on Community. Furthermore, the ‘here and now’ culture, which is prevalent in western Economies, must be avoided at all costs in favour of long-term policies and designs. We also need to overcome our constricted ‘Container Space’ vision which many companies succumb to, and instead, adopt a more global, more interconnected view of business. Additionally, multi-culturalism must be incorporated into all our actions, as we give birth to a more dynamic world, where dialogue and the construction of new spaces for participation are established in a way which is conducive to improving solidarity and reducing social inequalities.

One may ask, why? The fact is, the new geographical configuration of competitiveness is already a reality with the majority of economic growth globally taking place within cities. As such, 50% of welfare worldwide is held within 25 cities (according to UN findings). Moreover, The Oxford Institute for Economics cites that 57% of Global GDP is concentrated within the 750 most economically dynamic cities in the world. It has been forecast that the majority of new wealth created in the decades to come will be centred around mega-cities or mega-regions, construed as the new geographical spaces or ‘base areas’ where the economic and social development of the planet will take place.

Identity and social cohesion

Irrespective of my own personal stance in favour of greater levels of self-governance in Euskadi to develop our own national and social identity, the reality of our situation here must drive us forward in the following ways: towards establishing a geostrategic positioning that places us in global networks, and to promoting mechanisms of connectivity across all sectors of Basque society through suitable public-private partnerships. Additionally, we must strive to reinforce our identity as a mechanism for meaningful dialogue, in contrast to the global trend of homogeneity. All of this requires a profound transformation in our relationship with other regions so that we can foster and strengthen the ecosystem of competitiveness on which our nation has been building throughout its history.

As the American Economist, Professor Paul Krugman rightly points out: “There is solid evidence, that high inequality is a drag on growth, and that income redistribution can be good for the economy.” He goes on to say that, “There’s no evidence that making the rich richer enriches the nation as a whole, but there’s strong evidence of benefits from making the poor, less poor.”

Multiple economic sources worldwide confirm this assertion, proving that it is in regions and countries where there are lower levels of social inequality that greater levels of sustainable and lasting growth are achieved. This certainty has presided over the actions of the Basque Government in recent years; and this is nothing that we didn’t already know in our society, whose distinctive quality is precisely this awareness, yet what these expert findings do provide us with, is renewed confidence regarding the route Euskadi must take in the future.

I agree wholeheartedly with the distinguished professor. I believe it is imperative to continue progressing towards establishing our own societal model which combines wealth creation with a reduction in social inequality, both in private and public sector organisations. Such a model would be nourished with new economic visions, both social and competitive, regarding the re-distribution of wealth, and which seeks solutions to global challenges. Meanwhile, through our actions, we keep our own intergenerational commitments entrenched in our social values governed by solidarity, effort, co-operation, dialogue, multi-culturalism, among others. 

Basque society is imbued with a strong sense of community spirit. Individuals and associations actively come together, not just to support an improvement in the quality of life of citizens, but also to systematically create efficient models of collaboration in public-private partnerships. It is therefore, no accident that we rank highly in the Human Development Index, one of the world’s most reputable indicators of social cohesion.

Business model and Education

The business model of our companies, with a high level of employee sharing (regardless of the type of legal entity it may be), contributes to better income distribution, to the design of projects which are competitive over the long-term, and to creating the sense of a deeply-rooted society and region. It’s a commitment to a kind of competitiveness which ensures both the growth of the business project and the adherence to the social vision of the Company.

For all this, I advocate the creation of organisations which are focused on participatory values more and more, since these entities are, as Economics Nobel Prize winner Joseph Stiglitz reminds us, “The alternative to the economic model founded on selfishness; a model which only serves to increase inequality. These alternatives, however, would provide the best insulation against an economy which is becoming increasingly volatile.”

We have to find a way to ensure that our society learns to adapt with rigour, precision and agility, to the changes taking place around the world and immediately around us. In my opinion, the quality of our education system will determine the kindness of our future business project. As Peter Senge proclaims, “The only source of sustainable competitive advantage in the future, is the quality of a country’s education system.”

On this road, my priority would be to make an unequivocal pledge to revolutionising our education system, which despite its proven virtues and capacities, needs to be the cornerstone of the process of social transformation in the new world in which we will have to compete during this century. Challenges abound: the quest for finding talent, the arrival of new models of wealth creation, the growing international presence, and the need to live multi-culturally along with the advances in science and technology. We are thus behoved to generate a new education structure adapted to the new scenario in order to bolster and fortify the Basque society of tomorrow. I fully concur with Nelson Mandela when he asserted, “Educate, educate, educate; this is the fundamental mission of all those leading society.”

I honestly believe that we need a social movement which works for an overhaul of the education system: We must train our children and young people in values, skills and knowledge adapted to our new realities. However, we also need to train our teachers to the highest level as it can’t be right that for years a teaching degree has been one of the courses with the least recognition and the least demanding training. Nonetheless, teachers need to be adequately remunerated, and we should apply didactic methods which encourage the intellectual curiosity of students, including critical thinking skills, the ability to learn, creativity, diversity, team-work, and entrepreneurial skills, whilst ensuring the integration of competitiveness and social cohesion.
This is a pledge from Euskadi, by contributing our grain of sand, to transform and to build a more cohesive, and just world.

Sabin Azua

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